Ecommerce retailers have hundreds of tactics they can use to improve their sites, but it can be hard to point to a direct impact on revenue growth. In this members’ infographic, we look at how some of the top features and functions of leading ecommerce sites relate to growth over the past five years.
For example, retailers offering some form of free shipping grew at a compound annual growth rate (CAGR) of XX.X% over the last five years, compared to just XX.X% CAGR for those offering no free shipping. The 2022 Digital Commerce 360 Top 1000 five-year CAGR was XX.X%. Retailers with paid memberships grew far faster than those without over the past five years.
But not every tactic means better growth. Retailers with loyalty programs grew at a five-year CAGR of XX.X%, while those without one grew 22.9% during the same period.
Looking at yearly growth numbers, things get a little strange. While 2020 saw retailers that capitalized on omnichannel features and improved shipping methods grow dramatically, retailers without those features caught up in 2021.
Below are yearly breakdowns of web sales growth among retailers with some of the top ecommerce features available in 2021.
Omnichannel offerings had pandemic power
Retailers able to use their retail chains for online pickups had a clear advantage during the start of the pandemic. Stores offering in-store pickup grew XX.X% year over year in 2020, compared to 30.7% growth among retailers without the pickup option.
For curbside pickup, the difference was even more stark, with 57.1% growth among retailers bring items to cars, compared to XX.X%. Across the Top 1000, retailers grew XX.X% in 2020.
However, retailers without those services showed faster growth in 2021. While retailers able to roll out those omnichannel services may have taken an early lead in the major shift to ecommerce enabled by the pandemic, retailers without in-store or curbside pickup grew faster than those with the features in 2021.
Still, over the two-year period of the pandemic, retailers with those features grew more. Those with in-store pickup grew XX.X% compared to XX.X% for those without, while retailers offering curbside pickup grew XX.X% over two years compared to XX.X% for those without it. The Top 1000 combined grew XX.X%.
Domestic focus wins out
Retailers shipping abroad have generally underperformed compared to the Top 1000 as a whole, but that turned around in 2021. The five-year CAGR for retailers shipping to European (XX.X%) and Asia-Pacific (21.0%) regions underperformed the compared to who did not, as well as Top 1000 retailers (XX.X%). Retailers shipping to Latin America grew nearly the same as the Top 1000 over the past five years.
However, in 2021, retailers shipping to each of those regions outperformed the combined Top 1000. As supply chain constraints tightened domestic inventory, other regions may have had more growth.
Strong growth for buy now, pay later providers
Retailers offering consumers a way to defer payments saw big growth during the pandemic, up XX.X% compared to XX.X% for those without. But the growth lead narrowed in 2021, outperforming growth of the Top 1000 by just 0.1 percentage point at XX.X%.
However, this may be a case of retailers playing catch-up. In 2021, the availability of pay-later services at Top 1000 retailers grew XX.X%, with nearly half of North America’s top retailers offering buy now, pay later options in some form.
The Amazon Angle
Many of the most common ecommerce features are common because of one player: Amazon.com Inc. The ecommerce giant often seems to set trends in online retail, from two-day shipping to marketplace selling.
For retailers looking to take on Amazon, some of those offerings may be more helpful than others. Paid memberships seem to perform much better than free loyalty programs, as mentioned above.
Free shipping is also a big success. Retailers offering any form of free shipping historically perform above the Top 1000 baseline, with a five-year CAGR of XX.X% compared to XX.X% for the Top 1000.
Fast delivery also has its benefits, with same-day delivery retailers achieving a XX.X% CAGR over five years and retailers with next-day delivery growing a comparable XX.X%.
Amazon also provides an marketplace for more than half of Top 1000 retailers to sell their goods. Retailers selling on Amazon grew at a five-year CAGR of XX.X%. While many fewer retailers sell on Walmart Inc.’s marketplace — just XX.X% of the Top 1000 — those retailers grew faster over the past five years, with a CAGR of XX.X%.
In 2021, retailers selling on any marketplaces generally performed better than those that didn’t, but Top 1000 eBay sellers routinely underperform the Top 1000, and 2021 was no exception for them. Retailers in the Top 1000 selling on eBay grew just XX.X% in 2021, compared to XX.X% for those who did not.